Growing Asia-Pacific demand drives cautious global dairy growth

By RJ Whitehead

- Last updated on GMT

Photo: iStock
Photo: iStock

Related tags: Milk

With three of the world’s leading dairy brands, Asia-Pacific will drive modest growth in the global market, alongside increased demand from the Middle East, Africa and Eastern Europe.

According to consumer insight analyst Canadean, the global dairy and soy food market will rise to US$773.4bn by 2020 from US$617.9bn in 2015, representing a compound annual growth rate of 4.6%.

Canadean’s latest market report finds that this cautious growth will be driven primarily by emerging and developing markets, in contrast to western Europe and North America, where weaker market growth is drawn from economic fragility.

Changing consumer preferences and purchase patterns due to socio-economic and demographic changes have created new market dynamics​,” said Kiran Akkineni, a Canadean analyst. 

While the key markets of western Europe and North America have witnessed stagnancy in liquid milk consumption, paired with fast growth in processed and soy products, developing countries have recorded steep growth in demand for dairy products owing to their fairly low per-capita consumption​.”

Consumption of milk in North America is currently declining as consumers opt for alternative beverages, such as juices and vitamin-infused water. By contrast, the rise in per-capita dairy consumption by the growing middle-class population in developing markets will drive growth in the dairy and soy foods market.

Canadean’s analysis reveals that consumers in developed markets tend to base their beverage choices on a product’s level of personalisation, whether they can be consumed on-the-go, and whether they can provide a novel experience. 

Conversely, consumers in emerging countries, among them China and India, place a greater emphasis on nutritional value, following health and wellness trends.

Despite these regional differences in beverage consumption, value-for-money remains an important differentiating factor globally, as consumers opt for products perceived to provide this​,” added Akkineni. 

Consequently, there is considerable rise in demand for discount brands and private label products. The global dairy and soy food market is highly fragmented with the top 5 brands holding less than 6% market share. Mengniu, Activia, Amul, Kraft and Yili were the leading brands by market share in 2015​.”

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